Powell Was Clear: Don’t Expect Early Easing 😱
Fed Chair Jerome Powell did not signal a clear shift in monetary policy at his latest press conference. He emphasized that the Fed is currently in a “wait & see” mode and that interest rate decisions will be evaluated meeting by meeting, based on incoming data.
👉 According to Powell, the impact of tariffs on goods prices could peak during the year and then gradually fade.
👉 On the labor market, the door was left open: if downside risks in employment re-emerge, this could become a signal for easing monetary policy.
👉 He also noted that within the Fed, labor market data is viewed as a more reliable indicator than GDP.
Regarding the overall risk outlook, Powell stated that risks on both inflation and employment have eased somewhat. Looking at the December economic projections, most officials expect a transition toward a more normal economic balance. Powell also said that, given the current data, it is difficult to argue that monetary policy is “overly restrictive.”